CVS Health Corporation and Target Corporation have announced that they have created a definitive agreement. CVS Health will acquire Target’s pharmacy and clinic businesses for approximately $1.9 billion. CVS Health will also acquire Target’s more than 1,660 pharmacies located in 47 states. These will be operated through a store-within-a-store format and branded as CVS/pharmacy.

A CVS/pharmacy brand will be included in every new Target store that offers pharmacy services. The new Target clinics will be called MinuteClinic, and CVS Health will also open up to 20 new clinics in Target stores as a part of the transaction. The new clinics will be part of CVS/minute clinic’s plan to operate 1,500 clinics by 2017.

Also a part of the transaction, CVS Health and Target plan to develop five to 10 small, stores over a two-year period following the closing of the transaction. These will be branded as TargetExpress and include a CVS/pharmacy.

Larry Merlo, CVS Health President and CEO, mentioned in a statement: “This strategic relationship with Target supports the highly complementary customer base, brand and culture we share.” He said. “When we introduced the new name for our company, CVS Health, we began a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism with consumer choice and accountability growing. This relationship with Target will provide consumers with expanded options and access to our unique health care services that lead to better health outcomes and lower overall health care costs.”

Brian Cornell, Target Chairman and CEO, also mentioned in a statement “At Target, we’ve talked a lot about the evolving preferences of our guests and this partnership demonstrates that we’re committed to putting them at the forefront of everything we do.” He added “By partnering with CVS Health, we will offer our guests industry leading health care services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests.”

Following completion of the transaction, Target guests will have access to CVS Health’s leading pharmacy care programs and medical clinic services. Pharmacy programs, including Pharmacy Advisor, Specialty Connect and Maintenance Choice, will help consumers achieve better medication adherence through convenience and enhanced pharmacy care counseling. The company is also committed to providing low-cost generic drug option. This acquisition is consistent with each company’s stated goals of investing in core businesses that help drive growth.

The transaction is subject to customary closing conditions, including necessary regulatory clearance. In-store changes will be rolled out over a period of several months thereafter, as CVS Health and Target work to ensure the smoothest possible transition for all pharmacy and clinic patients. CVS Health is committing to offering the approximately 14,000 in-store Target health care professionals comparable positions with CVS Health as part of the transition. Also following the deal closing, Target will further evaluate the business impact and related support needs at its headquarters locations.

About CVS Health

CVS Health (formerly CVS Caremark Corporation) is an American retailer and health care company. CVS Health operates over 7,700 CVS Pharmacy and Longs Drugs stores; a pharmacy benefit manager, mail order and specialty pharmacies, a retail-based health clinic subsidiary, MinuteClinic; and an online pharmacy, CVS.com. CVS Health is chartered in Delaware, and is headquartered in Woonsocket, Rhode Island, where its four business units are also headquartered. CVS Health stock market evolution: http://www.marketwatch.com/investing/stock/cvs

About Larry Merlo

Larry Merlo is President and Chief Executive Officer of CVS Health. Under Merlo’s leadership, the company is transforming health care by delivering breakthrough products and services. Merlo has received numerous professional honors, including his past role as chairman of the Board for the National Association of Chain Drug Stores (NACDS), where he still serves on the Board’s Executive Committee. He is a graduate of the University of Pittsburgh School of Pharmacy.

About Target Corporation

Target Corporation is an American retailing company, founded in 1902 and headquartered in Minneapolis, Minnesota. Target operates 1,934 stores in the United States; it began operations in Canada in March 2013 and operated 127 locations through its Canadian subsidiary. By 2015, it had 133 stores in Canada. Target stock market evolution: http://www.marketwatch.com/investing/stock/tgt

About Brian Cornell

Brian Cornell is chairman of the board and chief executive officer of Target Corporation. He joined Target in 2014 after serving as CEO of PepsiCo Americas Foods, the largest business sector of PepsiCo. Cornell has served on the board of directors for Home Depot and OfficeMax and on the board of trustees for the Culinary Institute of America. He currently serves on the board of directors for the UCLA Anderson Board of Visitors and Polaris Industries Inc. Cornell earned a bachelor’s degree at the University of California Los Angeles in 1981 and attended UCLA’s Anderson School of Management.